Poor nations told to tap power of Web

NAIROBI, KENYA: With online business increasingly driving economic growth, developing nations' top priority should be the infrastructure their citizens need to get connected, delegates at an Internet conference in Nairobi said this week.

The Internet's potential to raise living standards is under-exploited in the developing world, where just 21 per cent of the population has access, compared with 69 per cent in the developed world.

In a study published earlier this year, consultancy Mckinsey found that the Internet accounted for 21 per cent of economic growth in mature economies, and that almost $8 trillion changes hands through e-commerce each year.

But regions such as Africa, lacking the broadband infrastructure mature economies enjoy, have an uphill struggle to encourage telecoms operators to invest in the mobile networks needed to bring the Internet to the masses -- especially when the masses have little disposable income to repay their investment.

"There is no way developing countries should sit back and wait, because online activities are driving offline activities," said Joe Mucheru, head of Google in Sub-Saharan Africa.

Participants at the United Nations-sponsored Internet Governance Forum said there was a need to expand infrastructure such as undersea cables and wireless networks for markets where the primary mode of connection to the Web is by mobile phone.

Increased bandwidth capacity and increased competition will cut prices and allow more people to get connected, government officials and company executives attending the forum said.

Some Western telecoms operators facing stagnation at home are prepared to make big bets on connecting developing nations; France Telecom, under the brand name Orange, is seeking to double its revenue in the Middle East and Africa to 7 billion euros ($9.5 billion) in the coming years.

It is already present in Egypt, Tunisia, Senegal and Kenya, among other African countries. One of its present projects is the building of an undersea cable to improve Internet connectivity in west Africa.

"We've prioritized spending on the undersea cables, since that will really be a vast improvement to what is currently available," said Thierry Bonhomme, head of networks at France Telecom.

Today, much of Africa's Internet traffic is delivered via satellites, which have far less capacity and connectivity than the intercontinental cables that are slowly being built.

In Nigeria, it costs $1,100 to buy capacity per megabyte on the Lagos to Abuja link -- nearly double the $600 it costs to buy the same capacity on the much longer Lagos to London link, due to the lack of internal infrastructure once the signal reaches Africa.